Saha grumbles as strong baht carries on
Saha Group, the country’s biggest consumer goods conglomerate, has warned that the continued strong baht could weaken consumer purchasing power in the second half of the year even as the economy heats up.
Group chairman Boonsithi Chokwatana said baht appreciation could lower exports of crops and eventually affect farmers and rural residents.
Mr Boonsithi said overall consumption in the first five months grew slightly, but he anticipates an improvement in the second half because of the low rate of unemployment in the country and the economic recovery in many countries around the globe.
“The sluggish [consumer] economy is not only in Thailand but around the world because of a big change in consumers’ behaviour as they shift to purchase via online channels,” he said.
He said that first-quarter growth in exports had a positive impact on the economy but that robust shipments only benefited the upper-end segment, while people i n the farmlands got little from it. Worse, the stronger baht has deterred shipments of several key farm products.
“As businessmen, we are always positive about future sentiment, but we cannot say it will be very good because there are many volatile factors like the US-Iran dispute, which recently drove up fuel prices,” Mr Boonsithi said.
He said next year’s general election, expected to be held some time in February, could be a positive factor to uplift sentiment, though he expressed reservations.
“Thai people still have jobs and earn income, but they rarely spend,” he said.
Saha Group makes and supplies a wide range of consumer goods to local and overseas markets.
The sales of one of its key products, Mama brand instant noodles, are often used as a barometer for the health of the economy.
The group exports products to neighbouring Cambodia, Laos, Myanmar and Vietnam, which all together account for 20-30% of total sales. CLMV activity has shifted from sales through border dealers to direct orders from Saha Group, Mr Boonsithi said.
To stimulate local consumption, the group will hold its 22nd Saha Group Fair at Bitec from June 28 to July 1.
Saha Group yesterday signed a memorandum of understanding with SET-listed BTS Group Holdings Plc on several partnerships, including mobile payment provider Rabbit Line Pay, a loyalty programme and use of big data.
Vichai Kulsomphob, president of Saha Pathana Inter-Holding Plc, a Saha Group subsidiary, said the partnerships will also include distribution deals through which Saha Group will sell products at BTS stations on shelves or in vending machines.
The drive will also include smart sampling, whereby Saha Group will distribute samples of new products to target groups using delivery service Kerry Express.
“U City, one of BTS Group’s subsidiaries, has many hotels in Thailand and overseas where we can sell products like bed sheets and pillowcases,” Mr Vichai said.